In spite of a rise in many key measures of productivity, profitability slipped in 2007 for specialty ski shops, according to the new Cost of Doing Business published by the National Ski & Snowboard Retailers Association (NSSRA).

Non-area shops saw profitability slip to 2.1% of merchandise sales in the 2008 Survey versus 4.6% in the previous survey. Area shops saw profitability slip less dramatically, to 3.1% of sales in the 2008 Survey versus 3.7% in the previous survey.

Non-area shops saw rises in three key areas of productivity --- sales per selling square foot ($280 in the 2008 survey versus $265 in the 2006 survey), gross margin (44% versus 40%) and inventory turnover (1.9x versus 1.7x). However, the rises were more than offset by a sharp rise in operating expenses.Operating expenses rose to 43% of sales versus 39% two years earlier.

Although area shops did not show the same kind of productivity growth, they were able to reduce operating expenses significantly. Operating expenses fell to 40.8% of sales in the new survey versus 46.4% in the previous survey. Sales per selling square foot fell to $329 versus $345. Margins increased slightly, 40.1% versus 39.5%. Inventory turnover was identical at 1.4x.

The report provides segmentation by sales volume, by area versus non-area shops, by shop square footage, by single versus mult-shop operations and by high profitability shops.

In addition to balance sheet and income statement data, the report provides measures of profitability, inventory productivity, space productivity, asset productivity, personnel productivity and financial management leverage.

“The 44-page report provides benchmarks to pinpoint strengths, weaknesses and improvement opportunities. Information on gross margins and inventory turnover provide guidelines for improving profitability” NSSRA President Thomas B. Doyle said. “The response rate was up almost 50% from the previous survey, thereby providing a higher quality of data.”

The new NSSRA Cost of Doing Business Survey has been sent to members. Non-members may purchase the survey for $150. Contact NSSRA at 847/391-9825 or info@nssra.com.